China’s tech giants such as bytedance, Alibaba and Tencent have secured Nvidia chips in a large scale-out of fear of US export restrictions. That is behind the mega deal.
• China’s tech giants have secured Nvidia chips in the billion value
• H20 chip was specially adapted for exports
• Companies are looking for alternatives to circumvent the rules
In the middle of growing geopolitical tensions between the USA and China, large Chinese technology groups have invested billions in the acquisition of special AI chips from NVIDIA in a real race against the time. As the business magazine Nikkei Asia reports, companies such as Bytedance, Alibaba and Tencent Massiv Nvidia H20 chips have bought-out of fear of US export restrictions.
Bytedance, Alibaba & Co.: Eil purchases to the extent of an annual stock
According to the report, the three tech giants secured around one million H20 chips together-which corresponds to almost an annual supply. These chips were specifically ordered before the new US restrictions come into force in April 2025. According to Investing.com, citing Nikkei Asia, bytedance is said to have particularly aggressively accessed. Together with other tech groups, urgent orders worth over $ 12 billion were abandoned. According to the report, a significant part of these orders was delivered before the new rules came into force.
H20 chips: The “approval-friendly” variant of the H100
The NVIDIA H20 chips are a modified variant of the powerful H100 model, which is at the center of numerous AI applications. The H20 version was specially adapted to meet the US exports-with a reduced computing power, but sufficient capacity for demanding AI inferiority tasks.
In China in particular, the H20 chips are very popular due to the price-performance ratios and availability. This makes them particularly attractive for companies that operate large data centers with AI systems – such as for chatbots, recommendation systems or machine learning.
Nvidia expects billions in losses
The US group Nvidia does not remain unaffected by the developments. At the beginning of April, the company announced that the new export restrictions would expect sales of around $ 5.5 billion in the first quarter of 2025.
Nvidia thus underlines how much the Chinese market – despite political tensions – is important for its own business development. China has been a high-growth sales market for AI hardware in recent years.
Huawei as a profiteer? Alternative backs in the focus
Since no new deliveries of the H20 chips are allowed to take place to China, Chinese tech companies are focusing on domestic alternatives. Huaweis ascend chips in particular are reportedly considered a possible replacement. At the same time, according to Investing.com, citing Nikkei Asia, possibilities to avoid export restrictions through the establishment of foreign subsidiaries.
This development is not surprising: the demand for computing power for artificial intelligence in China is growing rapidly. Drivers include applications such as Deepseek, which was integrated into the popular Messenger Wechat by Tencent.
Tech conflict between the USA and China intensifies
The massive H20 deal illustrates how very geopolitical tensions now have direct effects on the global technology market. While the United States is trying to restrict Chinese access to high-end AI technology through export controls, China’s companies are working hard to secure its security of supply in the long term-for example with billion dollar investments and own chip developments.
The next few months could be decisive: it remains to be seen whether Chinese alternatives can compete in terms of performance and scalability with Nvidia – or whether the global AI race enters a new phase.
Editor finance.net
By the way: Alibaba and other US shares are even tradable at Finance.net Zero until 11 p.m. (without order fees, plus spreads). Open Depot now for free And receive a free stock as a gift.
Selected leverage products on Alibaba
With knock-outs, speculative investors can participate disproportionately in price movements. Simply choose the desired lever and we will show you suitable open-end products on Alibaba
The lever must be between 2 and 20
Advertising